RELATED VIDEO

NEW DELHI: The bear market that started in 2008 is now beginning to become a true one, says Shankar Sharma of First Global in an exclusive interview with ET Now.

Speaking about how today's fall in the stock market is different from a routine bear market, he says, "What is different is that it is no more a stealth bear market, it has become evident. People kept talking that the mother of bull market is ahead us (after 2008), and all those things, but the fact is that the bear market already started then, today it is becoming manifest, it's becoming stark, it's becoming apparent."

Asked if the markets have bottomed out, Sharma says, "why do we start talking about bottoms when the market falls, why don't we talk about markets topping out when it rallies two per cent...Right now, capital preservation is the only goal; forget about bottom-fishing and all."

According to Sharma, the central banks of most Asian countries are risk-averse. "When central banks are risk-averse, you do not create bull markets," he opined. "Nifty is headed to levels of 5,000 in the near term," he added.

Acknowledging that India is seeing a very tough macroeconomic environment, Sharma warned that a 5% GDP growth cannot be taken for granted. "Markets do not value absolute growth, they look at relative changes of growth numbers," he said. "There will be flat or modest earnings growth this year," he added.

Sharma sees crude oil correcting substantially but is still bearish on commodities. "I don't agree with Jim Rogers. It is dumb to remain invested in commodities," he said.

Commenting on banking stocks, Sharma said that he is not looking to invest in them. "I see a huge downside. Profits for private sector banks will slow down," he told ET Now.

Sharma is of the opinion that IT stocks will hold their head above the water and that Infosys will be a better company under Narayana Murthy's management.

Asked about the US markets, Sharma said that they will fall as well, though maybe not as much as EMs. "The key question is how quickly QE tapers off from September," he said.